stock was tumbling in premarket trading Tuesday, after the high-end apparel maker reported a wider-than-expected loss in its fiscal first quarter, as store closures and a more home-centric lifestyle dampened sales.
Ralph Lauren (ticker: RL) said it lost $127.7 million, or $1.75 per share, compared with earnings of $1.47 per share a year earlier. On an adjusted basis, the company lost $1.82 per share on revenue that plunged 65.9% year over year to $487.5 million. Analysts were looking for an adjusted per-share loss of $1.75 on $593 million in revenue.
Sales in North America fell 77% to $165 million, with same-store sales off 64%. A 3% increase in online sales couldn’t combat the 77% decline in bricks-and-mortar sales, although the company noted that most of its stores worldwide have reopened. Wholesale revenue dropped 93%. Overall digital sales in the quarter rose 13%.
Ralph Lauren didn’t provide full-year guidance, citing the pandemic, but warned that its results would be “significantly adversely impacted by the pandemic and prolonged demand recovery” throughout fiscal 2021.
The company stressed that its liquidity position was strong, with more than $2.7 billion in cash and investments on its balance sheet, and that it is continuing to reduce costs.
The stock was down 5.5% to $65.90, while
futures slipped 0.3%. The shares have declined 40.5% year to date through Monday’s close.
The company has struggled in recent years, as the athleisure trend has gained prominence, sometimes at the expense of Ralph Lauren’s more-preppy clothing. The Covid-19 crisis, which has many people staying home, has led even more shoppers to flock to comfort, with even jeans seeming too formal (or perhaps less forgiving of the Covid-15).
Last quarter was also a difficult one for Ralph Lauren, as many other companies that focus on dressier clothing have struggled. It has left investors wary of retailers in this space.
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